The telco topped up its five-year IBM extension with a further $175 million to continue to outsource management of IT operations and services.

The contact is designed to improve the telco's IT automation and remote management and reduce server build time.

Under the extended deal, IBM will introduce a 'factory-line' approach for server build and deployments, including standardisation of processes and tool sets for more than 3000 servers; streamline reporting for design and approvals; and introduce a consistent server base state.

Telstra has outsourced its entire IT operations to IBM under a six year contract worth about $1 billion.

The telco said the IT operations deal will lower technology costs and create a consistent, more automated IT framework.